Philips Launched New Licensing System to Prevent Short Reported Sales on Licensed CD-R Disks. Royalty Cut But Licensee Must Submit Buyers’ Information.

Philips launched a brand new licensing system called Veeza in January 2006 with respect to the licensing of CD-R technologies and is engaging in active negotiation with prospective local licensees.  However, as Philips has requested that the licensees disclose information about their business at length and the computation of the royalty payable is to operate retroactively with respect to short reported sales, no Taiwanese CD-R discs maker has signed to participate in the new licensing program.  

Under the Veeza system, the general licensing is changed to per lot licensing.  Compliant Veesa licensees will enjoy a 44% cut in the royalty rate which will be reduced to USD0.025 from USD0.045.  

Despite the substantial cut in the royalty rate, as Philips has requested that the licensee provide detailed information about the consignees of each lot of licensed CD-R discs it produces, ratify outstanding royalty payable on previous short reported sales and submit the relevant payment plan, Taiwanese CD-R discs makers are not without hesitation to join the new licensing program.   (2006.3)

/EMA